Reducing New York’s High Costs Of Doing Business Demands A Holistic Approach

Legislative column from Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua)
July 31, 2009

Since becoming Assembly Minority Leader, I have publicly and repeatedly called for the enactment of a statewide economic development and job creation plan. Currently, there is no formal plan in place at the Empire State Development Corporation, New York’s lead economic development agency that is supposed to help businesses and encourage investment. If you own or operate a business in New York, then this revelation and “news” that our state has some of the nation’s highest costs of doing business would hardly qualify as such. In fact, even for non-business owners, this fact is readily apparent, as New York leads the nation in job-killing taxes, fees, government mandates and energy costs.

Ask any taxpayer and they can attest to the cumulative, crushing financial burden caused by an avalanche of property taxes, Thruway tolls, SUNY tuition hikes, and billions in new and increased taxes and fees contained within the 2009-10 State Budget. As bad as those challenges are for individual taxpayers, the financial and regulatory obstacle course state government forces businesses to navigate is far worse. Countless studies have repeatedly confirmed that New York ranks as one of the most expensive, least competitive places in all of America to run a business. The following is a sampling of those findings as compiled by the Public Policy Institute of New York State, Inc. They are available on-line at

  • For 2009, New York is already ranked dead last among the 50 states in economic outlook, according to the American Legislative Exchange Council. We slipped seven places to 50 after having been ranked 43rd in economic performance;
  • Also for 2009, the Tax Foundation ranked our state business tax climate 49th – meaning we have the nation’s second-worst, just ahead of New Jersey;
  • Our state has the country’s second-highest cost of doing business – only Hawaii is more expensive, as noted by the Milken Institute in 2007;
  • Chief Executive Magazine ranked New York 49th in its 2008 “Best and Worst States” survey of places for jobs and business growth – only California was worse;
  • New York had America’s fourth highest residential and commercial electricity prices in 2007, as reported by the Energy Information Administration; and
  • When it comes to having “economic freedom” – defined as the regulatory and fiscal obstacles that state governments impose on their citizens – New York was, again, ranked dead last by the Pacific Research Institute.

As mentioned previously, countless studies, reports and analyses have reached the same conclusion: New York State leads the nation in an uncompetitive economy and costs of doing business. However, these findings only scratch the surface as to why businesses in New York State are at such a competitive disadvantage.

Addressing all these factors requires a holistic approach that extends well beyond reports or studies. Instead, it demands a deeper analysis of state government as a whole – along with its core philosophy for promoting economic development, offering targeted incentives to attract businesses and commitment to creating jobs where they are most needed: the private sector.

The first deficiency is embodied in an inexplicable lack of a statewide plan for economic development and private sector job creation. If you were to ask Governor Paterson, a Member of the state Legislature, or the head of a State Agency to show you a copy of New York’s “plan” for creating jobs, they could not produce one. Literally, there is no plan. With 854,200 New Yorkers unemployed and hurting – the highest since 1976 – it represents the height of irresponsibility for our state not to have such a plan already in place.

Second, instead of fast tracking job creation and targeted economic development, the existing patchwork quilt of State Agencies act as roadblocks for businesses looking to invest in New York. Layer upon layer of government bureaucracy, a needlessly duplicative web of licensing, regulations and paperwork, along with a permit process that is as costly as it is time consuming and people confusing, all send a message for prospective companies to look elsewhere. Additionally, the inflexibility of State Agencies driven by formulas, as opposed to results, when delivering targeted economic incentives to attract and retain employers further impairs New York’s bottom line.

Third, state government does not have a core philosophy that clearly says New York is open for business. From the Governor’s office down – to every State Agency, department and task force – there must be a unified message that is clear and consistent: New York is not only open for business, it wants your business! Having this message coming from every arm of state government would show companies that New York is finally ready, willing and able to get serious about improving its underperforming economy and stifling business climate.

Without question, New York’s job-killing taxes, energy prices, workers’ compensation costs, health care premiums, Thruway tolls, legal and regulatory expenses must be reduced. Equally important is addressing the root causes – lack of a statewide job creation plan, inflexible, bureaucratic State Agencies, no core philosophy in state government placing a premium on attracting and retaining businesses – of our uncompetitive economy and unfriendly business climate. In next week’s column, I will outline some of our Conference’s real solutions for achieving the goal of a competitive economy, more jobs and opportunities for all New Yorkers.

As always, constituents wishing to discuss this topic, or any other state-related matter, should contact my district office at (315) 781-2030, or e-mail me at